H. B. 2595
(By Delegates Williams and Carper)
[Introduced March 15, 1993; referred to the
Committee on Banking and Insurance.]
A BILL to amend and reenact section thirteen, article four,
chapter thirty-one-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
the powers of state banking institutions generally,
including the power to our real property.
Be it enacted by the Legislature of West Virginia:
That section thirteen, article four, chapter thirty-one-a of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-13. Powers of state banking institutions generally.
(a) Any state-chartered banking institution shall have and
exercise all of the powers necessary for, or incidental to, the
business of banking, and without limiting or restricting such
general powers, it shall have the right to buy or discount
promissory notes and bonds, negotiate drafts, bills of exchange
and other evidences of indebtedness, borrow money, receivedeposits on such terms and conditions as its officers may
prescribe, buy and sell, exchange, bank notes, bullion or coin,
loan money on personal or other security, rent safe-deposit boxes
and receive on deposit, for safekeeping, jewelry, plate, stocks,
bonds and personal property of whatsoever description and provide
customer services incidental to the business of banking,
including, but not limited to, the issuance and servicing of and
lending money by means of credit cards as letters of credit or
otherwise. Any state-chartered banking institution may accept,
for payment at a future date, not to exceed one year, drafts
drawn upon it by its customers. Any state-chartered banking
institution may issue letters of credit, with a specified
expiration date or for a definite term, authorizing the holders
thereof to draw drafts upon it or its correspondents, at sight or
on time. Any such banking institution may organize, acquire,
own, operate, dispose of, and otherwise manage wholly owned
subsidiary corporations for purposes incident to the banking
powers and services authorized by this chapter.
(b)(1) Any such banking institution may acquire, own, hold,
use and dispose of real estate, which shall in no case be carried
on its books at a value greater than the actual cost, subject to
the following limitations and for the following purposes:
(a) Such as shall be necessary for the convenient
transaction of its business, including any buildings, office
space or other facilities to rent as a source of income; such
investment hereafter made shall not exceed sixty-five percent ofthe amount of its capital stock and surplus, unless the consent
in writing of the commissioner of banking is first secured;
(2) Any such banking institution may acquire, own, hold, use
and dispose of real estate, which shall be carried on its books
at the lower of fair value or cost as defined in rules
promulgated by the commissioner of banking, under the following
circumstances:
(b) (i) Such as shall be mortgaged to it in good faith as
security for debts in its favor;
(c) (ii) Such as shall be conveyed to it in satisfaction of
debts previously contracted in the course of its business
dealings; and
(d) (iii) Such as it shall purchase at sales under
judgments, decrees, trust deeds or mortgages in its favor, or
shall purchase at private sale, to secure and effectuate the
payment of debts due to it. and
(e) (3) The value at which any real estate is held shall not
be increased by the addition thereto of taxes, insurance,
interest, ordinary repairs, or other charges which do not
materially enhance the value of the property.
(4) Any real estate acquired by any such banking institution
under subdivisions (c) and (d) (b)(2) (ii) and (iii) shall be
disposed of by the banking institution at the earliest
practicable date, but the officers thereof shall have a
reasonable discretion in the matter of the time to dispose of
such property in order to save the banking institution fromunnecessary losses.
In every case such property shall be disposed of within ten
years from the time it is acquired by the banking institution,
unless an extension of time is given in writing by the
commissioner of banking.
(5) No such banking institution shall hereafter invest more
than twenty percent of the amount of its capital and surplus in
furniture and fixtures, whether the same be installed in a
building owned by such banking institution, or in quarters leased
by it, unless the consent in writing of the commissioner of
banking is first secured.
NOTE: The purpose of this bill is to permit state chartered
banks to account for real estate acquired in satisfaction of
loans in a manner consistent with the accounting approach
utilized by national banks and in a manner consistent with
generally accepted accounting principles. The bill authorizes
the fair value approach and directs the commissioner of banking
to promulgate the technical rules of implementation.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.